Economic News

Harvard Economist Blames Twitter for Down Economy

A new study suggests that Twitter is the root cause of the current economic malaise. Policy experts predict a Twitter moratorium may be declared for Summer 2009 as part of an effort to stimulate economic production and reverse GDP declines.

Professor Martin Schmeldon of Harvard Business School recently released research findings that suggest excessive Twitter use may have caused the current economic downturn.
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"We see the rapid rise of Twitter usage in 2008 correlating very strongly with a tremendous decrease in American productivity," said Schmeldon. "Our regression analysis on the data suggests a causal relationship that may actually be larger than the impact of the much-touted subprime collateral debt refinancing triggers."

Twitter is a free social messaging utility for staying connected in real-time. Whenever the urge strikes you, you can tweet an answer to the simple question: What are you doing?

Employees who might otherwise be working productively and contributing to the economy can instead create Tweets, such as "I just realized I clipped all of my nails today except for one" or "My co-worker is drinking pepsi . Pepsi!!! I want some. Stupid Lent" or "Financial systems require high levels of trust and oversight. Take away the oversight and encourage high levels of risk for personal gain."

Large companies are shifting marketing budgets over to social media marketing initiatives that promise to quadruple revenues. For example, Comcast is an active Twitter user and tweets things like "@xyz, relooking at the picture it looks to me to be the box. The reason I say that is the bar is messed up too. I would hard reboot."

"The problem is that many of the marketers at these large companies really want to have some Twitter experience on their resume, so they are subverting dollars that might actually go to positive NPV projects," comments Schmeldon. "Twitter may be the largest contributor to public company value destruction that I've seen since we moved away from mark-to-market accounting rules back in 1982."

Beltway insider and renowned economic advisor, West Tirrettia, believes Schmeldon's study could have some implications for economic policy that comes out of the current legislative session. "Congress has duly taken note of this research," said Tirrettia. "We may see some Twitter moratoriums coming in future stimulus bills. It's really just a question of whether lawmakers are willing to put their necks out against something that has become very popular back home in their constituencies."

The statistical validity of Schmeldon's research has been questioned by many statisticians and economists, including Pat Sooshisif, an associate professor of public policy at the Yale School of Management. "I think an informed reader of this research paper should be able to determine that Schmeldon wasn't engaging in serious statistical analysis of this data," wrote Sooshisif in the March 2009 issue of The Journal of Economic Perspective and Analysis. "Schmeldon cites a dual inflection point in December 2008. The stochastic confidence interval for that assertion is very low, and it is our conclusion that the z-factor is not statistically significant." Professor Schmeldon did not return repeated calls seeking comment on this research.

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Want to learn more about this topic? If so, you will enjoy these articles:

Coincidence does not mean causality.
Coincidence does not mean causality.
Write this 100 times Professor Schmeldon.Stats 101.

Joel Gunz

3/19/2009

Dudes. Come on. This is an April Fool's joke, two weeks early. This reads like an Onion article.

betaphi

3/19/2009

What did that last guy say?

JHLundin

3/19/2009

...Let's see, it used to be that to show causality the treatment had to be both 'necessary' and 'sufficient'... Is Twitter either?

Axel Schultze

3/19/2009

This is like public television - If you have just no idea what you should do you repeat an old series.
In 1984 "experts" predicted that Personal Computers will cost the industry hundreds of millions because people will play games instead of work. 5 years later almost the same people sold consulting and programs to empower people to use PCs.
FAST FORWARD
1996 "Experts" predicted that the Internet will cost business hundreds of millions of dollars as people surf around instead of doing their work. 5 Years later "experts" helped companies to create an online presence and ecommerce sites.
FAST FORWARD
2009 "Highly respected" ....
You get the idea.
@AxelS

pm

3/19/2009

twitter has definitely affected my productivity. i have to limit myself to every other day.

Laney Maxwell

3/19/2009

Bush used fear to scare the civil liberties out of us, Obama is using the financial crisis to do the same. http://tr.im/hpEK
www.twitter.com/pandamop

Lisa Nirell

3/19/2009

So--is this the premise for Stephen Dubner's and Steven Levitt's sequel to "Freakonomics?" Nice try! OK, back to tweeting now.

edavaria

3/19/2009

That's definitely the wrong way to see the problem. Twitter definitely is a way of loosing time for the workers, but the companies should be ready to absorb and take advantage of new tools as soon as they start interfering with their own universes. Twitter can not only be an awesome Social Marketing tool, but also a tool for internal collaboration, product innovation, process innovation, or even collaboration with suppliers as well as customers... The world is not what used to be 50 years ago, but if Twitter has anything to do with the economy, it's not Twitter's fault... twitter/edavaria :)

SG10001000

3/19/2009

Statistically speaking, this might be some of the worst quantitative analysis I have ever seen. Why not just go qualitative? Maybe people just don't like money anymore?
I'd love to see the data sets published. Admittedly, I could not read the entire thing...the confidence interval has to be so low as to basically negate the entire article. Not to mention other statistical analyses...

vickey

3/19/2009

too much of any thing might be bad.

Steve Dodd

3/19/2009

LOL

dunce

3/19/2009

I'm sorry. This is just dumb. Blaming Twitter for the economic downturn is like blaming Santa Clause for the closing of Circuit City.
Although employee productivity may drop due to tweeting, this trend is no different with personal emails, March Madness bracket, Super Bowl office pools and Fantasy Sports leagues. The use of twitter can open up a corporate entity to their customers and provide a inexpensive medium to attract new clients and market their products/services. These companies should apply common sense policies on social networking in the workplace. Perhaps the workplace should embrace social networking services to help their employees be more engaged in their work while increasing productivity output through more sales or higher quality of customer service.

leelaa

3/19/2009

This is the stupidest article ever!

Celeste

3/19/2009

Hilarious - do you think maybe the reason the graphs cross where they do is all of the freshly unemployed spending their days surfing the net and tweeting???

kris

3/19/2009

Wow. Really? Ur an imbocile. I can't bieleve all the factors you disregard. You're concluding that in comparison to a major war to a receptionist doing her nails twittering, you're going to actually blame a free micro blogging service, instead of a multi trillion dollar war? Jesus christ, my unborn niece due in july, could debate this idiotic conclusion. How are you any different in people increasing "productivity" when you write such an outrageous article? You're results are funny. I would imagine people in their free time would twitter about dumb random everyday stuff. But its not due to twitter, its from the lack of jobs created by the depression caused from bush's genius orders

open_minded

3/19/2009

Not sure that you should blame Twitter, but I agree that workers become seriously unproductive whilst using the application.
I see the people i follow tweet the same tweets for days and days and days, then i add more followers they tweet the same stuff too.
Fact is that either the twitter creators are clever, or they had no clue whatsoever the utter waste of time that users incur using twitter on a daily basis - In this world of "mediocrity" give normal people the chance to shine where they can't on the web.
As we all know its not easy developing a good website,or coding an Android / Iphone application. Its easy to get followers however by talking the same talk and walking the same walk.
Truthfully, in my experience Twitter looks great from the outside, but on the inside it *definitely isn't what it seems.
Its a world of followers out there, and i sincerely feel the the true leaders would rather spend their time learning or doing something productive.. I know i get alot more satisfaction reading a technical book or increasing my skills for my future where it counts.
I would just like to *thank Professor Martin Schmeldon for having the guts to come out and say something about this - once is enough because the poor guy would get bashed on if he follows up.
Seriously i sometimes wonder what the world is coming to, you can't even speak your mind or you'll immediately get hated on...
Thank you all for posting this. Not that i hate Twitter, but agree that it is unproductive when taken too seriously.

Steve9000

3/19/2009

Hilarious! Well done.

Claire

3/19/2009

The most amazing thing is the number of people that believe this is a "true" story. We haven't steered away from Mark to Market accounting, first of all (isn't that what Fair Value accounting is all about). I bet if you google "Professor" Martin Schmeldon there is no such HBS professor. Nonetheless, there is a point to be made on loss of productivity...real question is how you can leverage these tools for productivity. Heard a Best Buy exec mention twitter as a way to set up quick "on the fly" meetings for a project group that cut across departments, geographies.

Eric Schmidt

3/19/2009

I am CEO of a large tech company. This is exactly what I have been telling my staff. Tools like Twitter are making my team very unproductive at a time when we all need to be focused on turning this economy around.

R Morgan MMORSE

3/19/2009

on the cotrary, it could inferred that the down turn has caused an increase in twitter usage - less work to do => more time to twitter?
Surely all employers would have to do is follow their employees on twitter to check that they are actually doing work?
Further, im hoping innovations like twitter will might actually help turn the economy around. Look what google did just after the eary 1990s recession?
tongue still in cheek

Danimal

3/19/2009

Well done! I can't wait to see how many media outlets pick this up and run with it!

Tim Armstrong

3/19/2009

Eric, I completely agree with your comment. I'm not impressed with Twitter as a tool, but you have to give them credit for building up a great brand.

DC Crowley

3/19/2009

I wonder if Professor Martin Schmeldon of Harvard Business School is not a crony of the rich and greedy. Many of these shining examples of greed have passed through Harvard - right?

Kathleen

3/19/2009

Oh come on, seriously?
With all the job losses and lay offs and employees having to do more work with fewer resources, I'd be more inclined to think productivity losses are related to being increasingly forced to multi-task. A known productivity killer.

zg

3/19/2009

This is pure non-sense. twitter might be non-sense as well, but it not causing economic downturn. We're in trouble because of banks, corps, and politicians. This article is actually dangerous. It prepared us to for possible 'moratorium' of Twitter: to stop people talk and communicate. What will be next to ban? Internet? Watch this space

eHonker

3/19/2009

This is troll post.
A Troll is nn individual that tries to sway, bully and antagonize people by posting inflammatory, irrelevant and off-topic comments in forums, chat rooms, and in product reviews. The goal is to elicit emotional responses and create havoc with the intention of having fun, being mischievous and sometimes destroying the community.

Dhsandler

3/19/2009

Repeat after me: correlation does not imply causation.

Tweetplate

3/19/2009

I call shenanigans! If anything, Twitter will help shorten recession.

Jonathan

3/19/2009

The complaints about Comcast using twitter struck me as particularly pathetic. I'm a new Comcast customer, and a problem with my install was fixed via interaction with Comcast's Twitter team. It's left me with a much better impression of the company than if I'd had to spend an hour on an automated phone system listening to muzak.

aaron

3/19/2009

I got this article on a twitter post. Ironic huh?

Samantha

3/19/2009

Wow, I've never read anything so stupid in my life. Seriously? If Twitter is such an issue in the workplace, block the website. End of issue.
It's fun, it's free, and it's GREAT for networking.
And being able to help your customers SO QUICKLY through a free program is FANTASTIC.
Ironically, I also was directed to this article via Twitter.

Stone Payton

3/19/2009

Ironic, found this article through twitter. Either this guy has a great sense of humor, or Harvard standards aren't what they used to be. Either way, it was a fun read . . . and a great reminder of just how easy it is to have stats say whatever you want them to say.

Vincent Lowe

3/19/2009

...I think everyone should take this very seriously! I mean it came from a Harvard economist. (I looked at his lapel pin.)
Believe this and call for legislative reform now! (Though I don't know how Obama got into this. I get tweets from him all the time.)
During the public discourse about the deleterious effects of Twitter, the rest of us are going to thrive by ignoring dire (and very silly) predictions by "experts" such as this one.
I am about to publish my findings on the statistical correlation between California drought and the decline of the economy. (Right after I finish seeing what my friends are saying on Twitter. That IS how I got here, after all.)
---v

eighteyes

3/19/2009

I disagree, I think the causation, if ANY goes the other way. (correlation != causation) As the economy slides into a downward spiral as a result of our piggish ways and reptilian leaders, we, the people seek more distraction, entertainment and community to make up for where our jobs and lives lack meaning.
Does Martin Schmeldon ever consider that the slow economy leads business to do less for fear of taking risks, and thus, many workers are underworked, especially in retail sectors. Internet is ubiquitous and the cognitive burden of contributing to twitter is mind-bogglingly low, unless you take to reading every tweet.
Twitter is a symptom of our economic feculance, not the cause. If anything, Martin Schmeldon, a Harvard economist has far more responsibility for not predicting and preventing this disaster then all of the collective Twitterdom, so it is especially ironic that he would place blame in such a short-sighted fashion.
And Martin Schmeldon works at Harvard? I'm glad I didn't go to school at that elite dump.

Allan

3/19/2009

Someone should tweet this.

Katie

3/19/2009

done! @Katiecat. And I agree with everyone on this...

Mark Brown

3/19/2009

It's a JOKE, knuckleheads. Very funny one, too. Well crafted and executed!
Who knew economists had a sense of humor?

Robert Murray

3/19/2009

What will be blamed next? So blame me! @thirddesign loves you!!

Azibe

3/19/2009

Follow me. I have the answers. @AziBe

Lewis

3/19/2009

On the contrary.....Social media sites like Twitter and Facebook continue to be top referring sites to our main websites. WHY??? Because I spend time on them networking and using them in a productive manner.

@RafaelMarquez

3/19/2009

This article is awesomely funny.

Mai

3/19/2009

This can't possibly be a serious study of a serious market. It's either a) someone tried Twitter/social media, failed miserably and is very bitter or b) simply doesn't get it and is in denial that worlds of people, communities, societies is changing because of this online phenomenon.
Blaming Twitter for the economic downturn is almost as absurd as any attempt to justify the AIG bonus payments.

Derek

3/19/2009

Whether real or not, this raises an important issue. When something new appears, we need to play with it in order to figure out if it is valuable. Smart employers will condone play time, even if there is no immediate ROI.

PopeHat

3/19/2009

I prefer to believe that every blog and commenter that has run this story is simply going along with the joke, because the alternative is too grim to contemplate.
But the thing about pirates causing global warming is definitely true.

BillB

3/19/2009

Oh, come on! Everyone knows that it's the lack of sunspot activity that caused the downturn. Look at any chart of sunspot activity since 2000, and you will see that the sunspot minimum aligns exactly with the economic downturn.
Twitter indeed!

Marissa T.

3/19/2009

When you can laugh about something bad, it means the end of the bad thing is getting nearer.

ITChE

3/19/2009

A very funny Twitter Satire. Thanks. Please tell West I said hi ;-)

Vic

3/19/2009

Hey, this junk science of Coincidence means causality worked for global warming, why not Twitter and the economy!

moses

3/19/2009

This is like saying an increase in sales of Playboy causes a decrease in number of babies. coincidence. yes. can be linked. yes. related. probably not. quit making stuff up, and do your job if you think that it will help the economy.

Hey Twits! This is a joke...aka Satire...aka Humor. "We may see some Twitter moratoriums coming in future stimulus bills." Tards...

The New Guy

3/19/2009

I'm having "Spoof Envy."
Nice!

Holly Powell

3/20/2009

is this serious? how did they conduct the study? hmmm...this intriguing.. Thanks for sharing..

New to Twitter

3/20/2009

the study seems plausible but I do recall something in stats about how you can't just say something causes something else if you have high corelation, then again, I did get a C in that class :)

Andrew Finkle

3/20/2009

Wow what a moronic statement...Do some people Twitter while they work? Yes... But Twitter is also a productiveity tool! I personally get MORE done by being able to reach out to multiple people at the same time, and sucking in knowledge it would take me weeks to track down on my own by using Twitter.
http://twitter.com/A_F

Solange

3/20/2009

Hoax or no hoax. Build a better, cheaper, more effective mousetrap and the "old guard" sees control slipping away. The other fear is that we will figure out there are more important things that wanton consumerism. The next step in our evolutionary process is collective (social) consciousness.

Lawrence Philip

3/20/2009

If Congress falls for this "research" as "Beltway insider and renowned economic advisor, West Tirrettia" fell for it; I'm moving to Slovakia.

ITChE

3/20/2009

I don't know why I didn't see it before but "this is a spoof".

Sid Parham

3/20/2009

We all know that Nero twitered while Rome burned.

@AronStevenson

3/20/2009

the birthrate is going up too, I'm guessing that's down to twitter. Life is tweet :-)

Richard

3/20/2009

Pretty funny that they post this article but on this page they have a "Follow Us On Twitter" link.

@raekaye

3/21/2009

I do not agree with this article at all! I am a new user to twitter and have found very useful information by using it. I work part time and homeschool two of my children and have used it to connect with other homeschool families. My husband, who is very active with Social Media has been unemployed for quite some time now due to downsizing at his company. He has had a very difficult time finding employement do to the current economy issues, but due to the fact that he has been using twitter and other types of social media in the interm, he has garnered several freelance jobs that have helped us out considerably. And as far as to corporations using twitter, we just happened to mention on twitter that we were not happy with Qwest service and within 5 minutes got a reply from them wanting to contact us to help us solve our problem! Within a week we had a new line run from the house to the main box! I had been trying to call them using traditional methods for a couple of months and not getting anywhere!! Not to mention the group 12for12k that I am a member of did a Tweetathon this week and raised over $12000 in just one day to help feed hungry children in the United States! Now tell me again how Twitter is not productive???

Ummm...Yeah no

3/21/2009

Is this a joke?

Benn

3/22/2009

It has to be a joke. It's purely a coincidence of timings.
In any event, if you use it properly, it should be increasing your productivity.

Keith Stieneke

3/22/2009

This is downright silly. Coincidence at best. Can anyone blame twitter without blaming MySpace, Facebook and any of the myriad of other social networking and micro-blogging sites? I think if used correctly they contribute to society.

sharon

3/22/2009

surely, this is a joke?!

Amy Domestico

3/23/2009

Good stuff, funny. Send it to Olbermann he can add it to http://www.youtube.com/watch?v=SLF4JQiWajw and look even more like a numbskull LOL

Lee

3/23/2009

Just canceled my Harvard Business Review subscription. All respect is lost.

kentropic

3/23/2009

The article is funny (especially the sample tweets), but the comments are hilarious. Brilliant stealth-packaging of the main point under "Related articles," too -- *res ipsa locquitur*!

David

3/23/2009

I love the Eric Schmidt comment. Odd that the CEO of Google would be checking out your blog! You'd think he has more important things to do. ;-)

Early April fool indeed. Complete balderdash! Go to this link http://tinyurl.com/b96b6h to find out what caused the financial disaster and the role faulty correlation and and causation theories played in it......

BizBuzz

3/23/2009

Based on the chart, it looks to me like the Dow started to fall in June 2008. Twitter usage was small then. So I don't think you can blame Twitter on the economy collapse. I blame Wall Street.

Jon Spangler

3/23/2009

I think our economic woes are deeper than previously believed: why did so many people take this article seriously?
Houston, we have a problem--and it isn't "twitter."

glen

3/24/2009

Twitter will get you through times of no money better than money will get you through times of no Twitter.

Mark Wallace

3/24/2009

If it were not for twitter, not sure I would have ever seen this.

@BHGRE_Sherry

3/24/2009

Track a sampling of employees, consultants, contractors and vendors Twitter/Facebook activity for a week or two during business hours. You will be surprised! Or maybe not. One thing about social networking is it is transparent and trackable. Is this the downfall of the economy? No, but excessive use might be damaging our businesses...

Astrospaced (@astrospaced)

3/24/2009

Thank you for this. We all need to spread the word about how @twitter is ruining the economy. I wouldn't be surprised if they are doing it on purpose. It seems to me that @twitter's entire mission is to destroy people and humiliate them.
They tried to destroy and humiliate me, but I fought back. I called the FBI and told them what happened and then @twitter decided to actually 'help' me by making thousands of people unfollow me all at once. It's a conspiracy. They don't like honest reporting about space news, and it is now clear that they don't like the economy. Something has to be done. It fills me with RAGE!!!1
ALSO, you twitter people don't even deserve Obama as president. The best thing that could possibly happen to this country is staring us in the face and all you people can think of is how to use twitter to ruin peoples' lives. It's despicable and shouldn't be tolerated.
Kudos to you guys at gaebler.com for spreading the truth about how vile and destructive twitter is. Next thing you know, twitter will be working with google to take all of our secrets. If they get our secrets, then what's to stop them from taking our houses and livelihoods?
I know two things very well: SPACE and SOCIAL MEDIA. I can see how I pose a threat to twitter. They don't like space. I don't trust nameless, faceless organizations that dislike space.
I'll show them.
http://twitter.com/astrospaced

Jennifer Quigley

3/24/2009

Some of this article feels like I'm hearing the first conservative reactions to rock-n-roll music. — Twitter will not be our downfall.
Thwarting work to Tweet half of the day is not good. I think the "why" is more important here, not Twitter.
Personally, I check my Twitter feed about 4-5 times during the work day to glance. Every day I find links to professional articles and events related to business that grows my knowledge. I as well pause when appropriate to post links that would be of interest to others in my profession. — My mind has been enriched by Twitter & I've met so many other professionals that I like globally who I would not have met otherwise.
I think pointing the finger at Twitter is thwarting the reasoning behind the "why," and denying the masifestations of human psychology. I would look deeper into the current state of what our system requires and it's relation to happiness, value / esteem, and love. (PS: If you are human, you should still have those emotions.)

againstastream

3/24/2009

I'm guilty. I tweet. I have twatted.

Leila

3/25/2009

I did a little research on this. Looks like Schmeldon has been fired (!) as a result of this shoddy study. Harvard no longer lists him as a professor on their staff. It's a wakeup call to academia. Don't lie with statistics or you will get caught.

Adamok

3/25/2009

Twitter has also resulted in an increase in Co2 emissions and contributed to Global warming ;-)

DebbyBruck

3/25/2009

This article is going viral. The whole economy will come down with the flu. Twitter is just learning how to fly; it's not the cause but the barometer of our future world. http://twitter.com/DebbyBruck

An American

3/25/2009

I am an American and I do not have a sense of humor.
Therefor I am taking this blog post at face value.
Coupled with my addiction to Twitter, I am taking an absurd amount of offense to this study.

ron

3/25/2009

what a load of clever 'twatter'

Walter Adamson

3/25/2009

I'd like to see a video interview of West Tirrettia if you can post on YouTube would be great!
Cheers.

Zubin Wadia

3/25/2009

Good stuff - I wrote along the same lines here, nice to see Harvard agreeing:
http://zwadia.com/?p=84

Anonymous Coward

3/26/2009

I think the ability to understand satire is inversely proportional to the amount of time spent consuming content in 140 characters or fewer.

Twisted

3/26/2009

West Tirrettia? It's an anagram for "Twitter Satire"! Pat Sooshisif? That one is an anagram for "This is a spoof"! Nice touch. Can't believe anybody didn't get that this was satire.

Sanjay

3/27/2009

One can waste one's time on many things. TV, alcohol, women, daydream. Personal choices are made by each of us. We are to blame if time is wasted, not Twitter or any other living thing.

sedonakathy

3/27/2009

And twitter will bring us out of the downturn.

eric

3/27/2009

Hilarious! I think the downturn is to blame for twitter's rise, since everyone is out of work and has time to waste!!! btw, follow me @EricOverman :)

Simber

3/29/2009

Breaking news: The Twitter moratorium mentioned in this article is in effect as of next wednesday!

Mark Nankman

3/30/2009

Brilliant! I have a different theory though. I say that, primarily, Apple is to blame for the recession. And now many many people with an iPhone - which they couldn't afford in the first place - are now jobless, they started tweeting like crazy, which is what you really see in your graph. I summarized my little theory here: http://www.capgemini.com/technology-blog/2009/03/apple_to_blame_for_the_weak_do.php

Gm-gG

3/31/2009

What if he means the downturn has as much to do with the debt problem as it has to do with twitter ?
or maybe he means our current analysis techniques are useless enough to imply something like that . .
Think people . . harvard professors don't publicly humiliate themselves too often when it comes to economics. .

rkitect

4/1/2009

If something such as Twitter is really the cause for the downfall of the economy, then the economy had bigger issues to begin with. If this is the case, then maybe we should put out legislation regarding all recreational activities that 'may' affect the productivity of America. This includes coffee breaks, water coolers, email, people using single monitors, hardware manufacturers with high RMA rates. There is a difference between coincidence and a solid link, which i seriously doubt twitter has to the fall of the economy. Twitter doesn't cause executives to hand out millions of dollars of borrowed tax payer money in the form of bonuses.

rkitect

4/1/2009

Hoc ergo propter hoc.

erich13

4/1/2009

OMG! You gotta be kidding me! This reminds me of the claim that Tetris was a plot!